If it doesn't look like your expected income will cover your spending needs during retirement, spend some time tinkering with the variables. For example, switching to a slightly more aggressive asset-allocation mix could improve your portfolio's return potential (but it could also increase its risk level, so don't go overboard and shift entirely into stocks). And if you're willing to work longer, you could reduce the number of years that you’ll spend in retirement (and, in turn, the need for income from your investment portfolio).

Also bear in mind that even though we've discussed a fixed withdrawal rate in this exercise, you of course will be able to withdraw more or less as circumstances dictate. In fact, a 2008 study from T. Rowe Price showed that the best strategy for retirees who encountered a bear market early on in retirement was to reduce their withdrawal rates. Doing so would help them avoid turning paper portfolio losses into real ones by having to sell out of their long-term investments at an inopportune time.